Frizzo7

Thanks, I already looked at that page and didn't get any answers with regards to whether Income Tax or Capital Gains tax applies. None of the Trustees are located in the UK and no capital gains tax will be paid by the Trustees in the UK. Let me re-word my example: In the current tax year, if I were to receive £100k as my final disbursement from the non-resident trust and the capital gains on the principal came to £50k (and the Trustees pay no UK taxes), would I just pay the 20% capital gains tax on the £50k? Or would the entire £100k be treated as general Income and thus subject to my applicable Income Tax rate?

I am the beneficiary of a US trust that will be wound up in the next couple of years. This is an American trust where everyone (trustees, beneficiaries, etc) other than me is located in the US. In accordance with US procedures, the Trustees in the US will pay all applicable taxes in the US before sending a final cash disbursement to each beneficiary. While this would be tax free if I were a US resident for tax purposes, I know that this will be taxed in the UK. My question is, which taxes will apply? Will it just be a capital gains tax on the capital gains of the trust? Or will this be treated as general income and taxed at a higher rate? As an example, in the current tax year, if I were to receive £100k as my final disbursement from the trust and the capital gains on the principal came to £50k, would I just pay the 20% capital gains tax on the £50k?